Banks refuse loans to beneficiaries of Amma two-wheeler scheme

Nivedha Selvam | Updated: Dec 4, 2018, 0:38 IST

Coimbatore: Mallika (name changed) was excited when she was selected as one of the beneficiaries under the Amma two-wheeler scheme. Soon after receiving the approval order, she along with her husband, rushed to the nearest two-wheeler showroom to book a vehicle, only to be turned away. She had the same experience at two other vehicle showrooms.“None of the showrooms we visited was ready to sell the vehicle when I told them that she was selected as a beneficiary of the scheme and was planning to apply for a bank loan,” said her husband. “They demanded ready cash.”“Without any other option, I pledged some jewellery for Rs 50,000 and purchased the vehicle. Now, every other month, I am using a portion of my salary to pay the interest,” he said. The vehicle was worth Rs 72,000.Not only Mallika, more than 90% of the beneficiaries of the scheme had to purchase the vehicles using cash after banks refused them loans.As many as 482 women were selected from Coimbatore to avail the subsidy. Of them, 287 have received the subsidy amount and the remaining are expecting to receive it within weeks, according to an official from Magalir thittam, the implementing body of the scheme.Explaining that the state government will provide either Rs 25,000 or 50% of the vehicle price, the official said that they have received over 21,000 applications for the 4,949 vehicles allotted for this year. “If we could give full cash and purchase the vehicle, why would we even apply for subsidy,” asked Jayanthi, another beneficiary, who also borrowed money to purchase the vehicle. “A month after I received my approval order and submitted the the vehicle registration book, the subsidy amount was credited to my account.”Another beneficiary said that she was told that priority would be given only to those, who had not opted for bank loan. “This was why, I preferred to borrow from a moneylender rather than approaching banks. The problems could have been sorted out if the state government had tied up with some banks,” she told TOI.

While the vehicle dealers blamed the bankers for the fiasco, an official with a bank said, “The vehicles purchased under the scheme could not be sold or seized by banks for non-payment of dues for up to three years. What would we do, if the beneficiaries fail to settle the amount or pay the interest?” Meanwhile, a government official said that they have been recommending nationalized banks and had held discussions with the banks several times.